A major focus of Treasurer Josh Frydenberg’s budget, delivered on Tuesday, was tax cuts for those earning up to $126,000. Middle-income earners are promised the biggest concessions under a Liberal government.
However, Mr Shorten signalled clearly that the Labor Party is focused on targeting tax concessions at low income earners.
“I acknowledge that our opponents have finally seen the light on supporting the bigger, better and fairer tax cuts for 10 million Australians that I put forward at my last budget reply speech. Tonight, I can confirm that, from 1 July, if you earn between $48,000 and $126,000, no matter who you vote for in May, you will get the same tax refund,” Mr Shorten said.
“But the Liberal tax plan does not do enough for 2.9 million Australians who will earn less than $40,000. About 57 per cent of these are women – childcare workers, classroom assistants, hairdressers, office managers, and they are parents returning to work part-time. In a lot of these cases, these are the very same workers in retail, hospitals, pharmacy and fast food who’ve already had their penalty rates arbitrarily cut,” he said.
“Tonight, I am pleased to say that in Chris Bowen’s first budget, Labor will provide a bigger tax refund than the Liberals for 3.6 million Australians – all told, an extra $1 billion for low-income earners in this country,” he said.
“We will not be signing up to the Liberals’ radical, right-wing, flat tax experiment way off in the future, a scheme that would see a nurse on $50,000 paying the same tax rate as a surgeon on $200,000. We won’t back a plan that gives a retail worker on $35,000 less than $5 a week, while an investment banker pockets more than $11,000 a year. This is not a tax plan, it’s a ticking debt bomb,” he said.
Negative gearing and capital gains tax
Further, the Labor Party plans to halve the capital gains discount for all assets purchased after the same date. In effect, this will reduce the capital gains tax discount for assets that are held longer than 12 months from 50 per cent to 25 per cent.
On both measures, all changes will be grandfathered, which means they won’t apply retrospectively.
“If you’re currently negatively gearing, the rules won’t change. If you want to use it on new homes, you still can. But you cannot have property investors playing with loaded dice against our young people, Generation Y and the Millennials,” Mr Shorten said in his speech yesterday.
“Instead of patronising millions of young Australians with lectures about cutting back on smashed avo, why don’t we tell them the truth? Getting together a 20 per cent deposit plus stamp duty is much, much harder than it was 20 or 25 years ago,” he said.
“And it is even more difficult when your government uses your taxpayer money to subsidise the property investors bidding against you. The inter-generational bias that the tax system has against young people must be called out. A government must be brave enough and decent enough to stop the bias against first home buyers and young Australians – and we will be that government.”
Standing firm on franking credits
Labor remains committed to scrapping cash refunds on excess dividend imputation credits, with exemptions for full and part pensioners.
“If the Tax Office pays a tax credit to someone who pays no tax, this is a gift. It is a gift that is costing taxpayers nearly $6 billion every year, and it is growing so fast it will soon be more than what we spend on our public schools. It’s not illegal; it’s not immoral, but it’s just not sustainable anymore,” he said.
Women and superannuation
Although the policy outline isn’t clear at this point, Labor has signalled plans to tackle the gaping superannuation savings gap between men and women.
“Whenever we talk about fair pay, it includes equal pay and fairer conditions for the women of Australia, a new push for better pay for women and in women-dominated industries like early education, new measures to help boost the superannuation of working women, and 10 days of paid leave for people dealing with family violence. This is what you get from a political party that walks the walk on equality for women and has so many talented women in our ranks in Parliament right now,” he said.
Medicare and medical funding
Labor, if elected, will invest $2.3 billion over the next four years to help cancer sufferers with the cost of cancer scans, medical appointments and medicine costs.
$600 million will be put towards eliminating all of the out-of-pocket costs for diagnostic imaging, with $433 million to cover specialist consultations for cancer patients.
“Cancer is a curse. I wish I could stand here tonight and guarantee that we’ll find a cure for each cancer,” said Mr Shorten.
“Until the day that we find a cure, I promise the men and women of Australia this: under Labor, if you’re battling cancer, you focus on getting well without worrying about going broke.”